Certified Government Financial Manager (CGFM)
Exam Verified Questions, Correct Answers, and
Detailed Explanations for Students||Already Graded
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1. The primary purpose of government financial management is to:
A. Maximize profits
B. Ensure compliance with tax regulations
C. Ensure accountability and stewardship of public resources
D. Minimize government spending
The focus of government financial management is to manage public
resources responsibly, ensuring accountability to citizens.
2. The Federal Accounting Standards Advisory Board (FASAB)
issues:
A. GAAP for private companies
B. Accounting standards for federal government entities
C. International financial reporting standards
D. Internal auditing guidelines
FASAB establishes accounting standards specifically for U.S. federal
government entities.
3. Which fund is used to account for government activities that are
primarily supported by taxes and grants?
A. Proprietary Fund
B. Fiduciary Fund
C. Governmental Fund
D. Enterprise Fund
Governmental funds track activities financed mainly through taxes,
grants, and general government revenue.
4. Accrual accounting is used by which type of fund?
A. Governmental Fund
B. Proprietary Fund
,C. Special Revenue Fund
D. Capital Projects Fund
Proprietary funds use accrual accounting because they report
economic resources, similar to business operations.
5. Which of the following is an example of a fiduciary fund?
A. General Fund
B. Capital Projects Fund
C. Enterprise Fund
D. Pension Trust Fund
Fiduciary funds report resources held for others, such as pensions or
other trust accounts.
6. The Modified Accrual Basis of Accounting recognizes revenues
when:
A. Collected
B. They are measurable and available
C. Earned, regardless of collection
D. Cash is disbursed
Modified accrual accounting focuses on current financial resources,
recognizing revenue when it is measurable and available.
7. Which of the following is the primary source of governmental
revenue?
A. Fines and fees
B. Taxes
C. Investment income
D. Grants from NGOs
Taxes are the main source of funding for most government activities.
8. The purpose of a budgetary control system is to:
A. Maximize profits
B. Avoid auditing requirements
C. Ensure that expenditures do not exceed authorized amounts
D. Reduce taxation
, Budgetary control ensures that government agencies spend within
legally authorized limits.
9. GASB stands for:
A. Government Accounting Standards Bureau
B. General Accounting Standards Board
C. Governmental Accounting Standards Board
D. Global Accounting Standards Board
GASB sets accounting and financial reporting standards for state and
local governments.
10. A government-wide statement of net position reports:
A. Only cash balances
B. Only fund balances
C. Revenues and expenditures
D. Assets, liabilities, and net position for the entire government
Government-wide financial statements show the overall financial
position, including all assets and liabilities.
11. Which of the following funds uses the economic resources
measurement focus?
A. General Fund
B. Special Revenue Fund
C. Enterprise Fund
D. Capital Projects Fund
Enterprise funds, like business-type activities, report all assets and
liabilities to show long-term economic resources.
12. The term “encumbrance” in government accounting refers to:
A. Actual expenditures
B. Commitments to spend funds
C. Revenues received
D. Liabilities for pensions
Encumbrances represent obligations such as purchase orders,
ensuring budgetary control before actual expenditures.
Exam Verified Questions, Correct Answers, and
Detailed Explanations for Students||Already Graded
A+
1. The primary purpose of government financial management is to:
A. Maximize profits
B. Ensure compliance with tax regulations
C. Ensure accountability and stewardship of public resources
D. Minimize government spending
The focus of government financial management is to manage public
resources responsibly, ensuring accountability to citizens.
2. The Federal Accounting Standards Advisory Board (FASAB)
issues:
A. GAAP for private companies
B. Accounting standards for federal government entities
C. International financial reporting standards
D. Internal auditing guidelines
FASAB establishes accounting standards specifically for U.S. federal
government entities.
3. Which fund is used to account for government activities that are
primarily supported by taxes and grants?
A. Proprietary Fund
B. Fiduciary Fund
C. Governmental Fund
D. Enterprise Fund
Governmental funds track activities financed mainly through taxes,
grants, and general government revenue.
4. Accrual accounting is used by which type of fund?
A. Governmental Fund
B. Proprietary Fund
,C. Special Revenue Fund
D. Capital Projects Fund
Proprietary funds use accrual accounting because they report
economic resources, similar to business operations.
5. Which of the following is an example of a fiduciary fund?
A. General Fund
B. Capital Projects Fund
C. Enterprise Fund
D. Pension Trust Fund
Fiduciary funds report resources held for others, such as pensions or
other trust accounts.
6. The Modified Accrual Basis of Accounting recognizes revenues
when:
A. Collected
B. They are measurable and available
C. Earned, regardless of collection
D. Cash is disbursed
Modified accrual accounting focuses on current financial resources,
recognizing revenue when it is measurable and available.
7. Which of the following is the primary source of governmental
revenue?
A. Fines and fees
B. Taxes
C. Investment income
D. Grants from NGOs
Taxes are the main source of funding for most government activities.
8. The purpose of a budgetary control system is to:
A. Maximize profits
B. Avoid auditing requirements
C. Ensure that expenditures do not exceed authorized amounts
D. Reduce taxation
, Budgetary control ensures that government agencies spend within
legally authorized limits.
9. GASB stands for:
A. Government Accounting Standards Bureau
B. General Accounting Standards Board
C. Governmental Accounting Standards Board
D. Global Accounting Standards Board
GASB sets accounting and financial reporting standards for state and
local governments.
10. A government-wide statement of net position reports:
A. Only cash balances
B. Only fund balances
C. Revenues and expenditures
D. Assets, liabilities, and net position for the entire government
Government-wide financial statements show the overall financial
position, including all assets and liabilities.
11. Which of the following funds uses the economic resources
measurement focus?
A. General Fund
B. Special Revenue Fund
C. Enterprise Fund
D. Capital Projects Fund
Enterprise funds, like business-type activities, report all assets and
liabilities to show long-term economic resources.
12. The term “encumbrance” in government accounting refers to:
A. Actual expenditures
B. Commitments to spend funds
C. Revenues received
D. Liabilities for pensions
Encumbrances represent obligations such as purchase orders,
ensuring budgetary control before actual expenditures.
